| October 18, 2001 |
| (For Your Information) |
Mazda Revises Forecast to Profit in First Half for 2001
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Mazda Motor Corporation today revised its financial results forecast for the first half of fiscal year 2001, announcing consolidated and unconsolidated profit on every basis for the period. The full year break-even forecast remains unchanged and will be reconfirmed when the company reports fully in mid-November.
This Is a positive indication that the company's Millennium Plan, announced last year to drive Mazda back to sustainable profitability, is the right strategy. Mazda President Mark Fields said: "We are dedicating this year to mastering execution and delivering on our commitments. There is a long way to go, and the business environment remains very tough, but we are quietly confident that we are on the right track." The revised forecast includes a consolidated revenue of 1,038 billion yen (US$8.7billion, 9.5 billion euro), an increase of 31.9 billion yen (US$268 million, 293 million euro) from the same period of the previous year but a decrease of 32 billion yen (US$270 million, 294 million euro) from the original projection. Operating profit is projected to be 11 billion yen (US$92 million, 101 million euro), an increase of 15.7 billion yen (US$132 million, 144 million euro) from the same period of the previous year, and up 18 billion yen (US$151 million, 165 million euro) from the original projection. Ordinary profit is projected to be 4.5 billion yen (US$38 million, 41 million euro), an increase of 21.1 billion yen (US$177 million, 194 million euro) from the same period of the previous year, and up 18.5 billion yen (US$155 million, 170 million euro) from the original projection. Net income is projected to be 1 billion yen (US$8 million, 9 million euro), an increase of 10.5 billion yen (US$88 million, 96 million euro) from the same period to the previous year, and up 10.5 billion yen (US$88 million, 96 million euro) from the original projection. Consolidated cash flow is a projected negative 41.6 billion yen (US$350 million, 382 million euro). However, this is an improvement of 43.4 billion yen (US$365 million, 398 million euro) from the original forecast. This negative cash flow is more than explained by Early Retirement Special Program payouts for employees who elected to participate in this program at the end of the last fiscal year. Net debt is expected to be 525.2 billion yen (US$4.4 billion, 4.8 billion euro), which is an increase of 40.6 billion yen (US$341 million, 372 million euro) from the end of the previous fiscal year. However, this is 40.8 billion yen (US$343 million, 374 million euro) lower than the original projection. On a non-consolidated basis, ordinary profit is projected to increase compared with the same period of the previous year by 27.2 billion yen (US$229 million, 250 million euro) to 10.9 billion yen (US$92 million, 100 million euro). This is an increase of 15.9 billion yen (US$134 million, 146 million euro) from the original projection. Net profit is projected to increase by 19.4 billion yen (US$163 million, 178 million euro) compared with the same period of the previous year, to 6.7 billion yen (US$56 million, 61 million euro). This is an increase of 8.7 billion yen (US$73 million, 80 million euro) from the original projection. The revised outlook for the First Half reflects broad-based improvements across most areas of Mazda's business, but particularly at the parent company. Favorable factors include greater cost reductions, favorable exchange rates net of price changes, and favorable volume and mix changes, which are more than explained by overseas markets. Fields added: "This performance is the best on an operating profit basis for two years and is demonstrable evidence of the progress Mazda is making in growing and reforming its business. We said we would report on our deliverables as we move forward -- for first half 2001 they are all met. But our Millennium Plan is a five year strategy and we will not rest until all its targets are met." Mazda will announce actual first half results and reconfirm its projection for the full year at the First Half Financial Results Announcement, scheduled for November 12. Note:
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